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LCP Investment Summary .. May 2021
Posted on 3 June, 2021 by Administrator
Global equity markets were flat (in € terms) over May. The returns to Euro investors were lower because of the Euro rising against the U.S. Dollar by nearly 2%. Markets were mixed over the month. Strong economic indicators in Europe, the U.S. and the U.K. were offset by the release of stronger than expected inflation data in both the U.S. and Germany.
This caused equity markets to fall but the U.S. Federal Reserve and the ECB both said that they believed that this was a temporary situation and so should not affect their respective policy measures for the moment. Investors also welcomed the release of the remaining Q1 2021 company earnings that continued to beat market expectations.
Longer-dated Eurozone bond prices fell 0.4% over the month, with the yield on the AAA Eurozone 15+ Year Index rising to 0.24% by month-end. The Euro Broad Sovereign 10+ Year Index fell by 0.2% with its yield at 0.83% at month-end.
Eurozone bond prices fell and yields rose over the first three weeks of May, but yields then fell back from a two year high (for German 10 Year Bunds) when ECB President Larage announced that it was still too early for the ECB to look at reducing its stimulus measures.
Sample DC Schemes
Two of our sample DC Strategies fell over May as longer-dated Eurozone government bonds prices were down.